EMERGING MARKETS-Brazil shares, currency drop on local political woes

lunes 23 de mayo de 2016 11:02 GYT

By Bruno Federowski
    SAO PAULO, May 23 (Reuters) - Brazil's stocks and currency
fell sharply on Monday on reports that a high-ranking minister,
in charge of securing legislative support for fiscal austerity
measures, had sought to obstruct a sweeping corruption probe.
    Planning Minister Romero Jucá agreed to a "national pact" to
weaken the country's biggest ever corruption investigation known
as operation "Car Wash," according to excerpts from taped
conversations published by the daily Folha de S. Paulo.
    Jucá ruled out resigning, saying he supported the
investigation centered at state-controlled oil company Petróleo
Brasileiro SA . 
    "Opposition lawmakers will seize the opportunity and there
is a concrete possibility he will be forced to leave
government," said Arlindo Sá, a derivatives broker with Ativa
brokerage in São Paulo.
    "To lose a minister this soon would spell very bad news for
this administration's credibility."
    Interim President Michel Temer's government will face his
first major challenge in Congress on Monday in the form of a
budget committee vote on whether to allow a record 170.5 billion
reais ($47.84 billion) primary deficit this year. 
    Brazil's Finance Minister Henrique Meirelles said the
government will announce short- and long-term measures on
Tuesday to tackle growing debt and limit spending. 
    Shares of Petrobras fell almost 5 percent, also tracking a
decline in oil prices, and weighed on the country's benchmark
Bovespa stock index.
    The move came despite well-received reports that Ivan
Monteiro will remain as the company's chief financial officer.
    The Brazilian real led the losses among Latin
American currencies, which weakened on the back of lower
commodity prices.
    The Colombian peso weakened slightly after the
country's central bank acted to stem the currency's slump on
    Key Latin American stock indexes and currencies at 1435 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets               788.92     0.47    -1.12
 MSCI LatAm                         2061.55    -0.87    13.65
 Brazil Bovespa                    49206.89    -1.04    13.51
 Mexico IPC                        45147.79    -0.02     5.05
 Chile IPSA                         3941.56     0.04     7.10
 Chile IGPA                        19416.98     0.07     6.97
 Argentina MerVal                  12619.73    -0.28     8.09
 Colombia IGBC                      9802.48     0.01    14.68
 Venezuela IBC                     15466.27    -0.02     6.02
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.5677    -1.43    10.63
 Mexico peso                        18.4250    -0.49    -6.49
 Chile peso                           693.1    -0.23     2.40
 Colombia peso                      3052.35    -0.11     3.83
 Peru sol                            3.3389    -0.21     2.25
 Argentina peso (interbank)         14.0000     0.29    -7.27
 Argentina peso (parallel)            14.62     0.34    -2.39

 (Additional reporting by Paula Arend Laier; Editing by
Bernadette Baum)